Can a business partner run a separate business out ofa shared business without the other partner’s knowledge?

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Can a business partner run a separate business out ofa shared business without the other partner’s knowledge?

I just found out that my business partner filed a separate business with another partner and used our business’s name and phone number as their business’s name and phone number. The other party’s name is not on the lease and I had no knowledge of this business being filed and operated out of the location I share. Can they do this?

Asked on July 23, 2011 New York

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

For your business partner to use your and his/her business name and phone number in a separate business with another person without your knowledge and consent is wrong. Each partner in a business has a fiduciary duty to act in good faith to the other and be honest.

What you say has been done by your partner behind your back seems to be a violation of his duties to you and a violation of your trust.

You need to confront him or her about the situation and make inquiries as to why this happened. It sounds like there are problems between you and him deeper than what you discovered. You might also consider consulting with a business law attorney about what happened.

Good luck.


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